Foreigners’ bank deposits have dropped by 40 bln in eight years

Greece is facing a double wave of departures by Greeks and also by foreign nationals, and the impact is already being reflected in official statistics.

Greece’s population is still shrinking at a rapid rate, while the age pyramid is changing considerably. The people leaving the country, whether they are Greek or foreign nationals, tend to belong to the most productive age groups and obviously take their children along, depriving the country of part of the next generation. On the other hand, elderly citizens are increasing, not only as a share of the population but also in absolute numbers.

The distortion of the labor force, the increase in pension spending – in spite of successive cuts passed by Parliament – and the reduction in bank deposits are three of the many ways that the phenomenon is impacting the economy.

Bank of Greece figures show that in the period from 2009 to 2016 the number of non-European Union citizens who reside in Greece declined by 153,143 people, resulting in the reduction of Greek bank deposits by at least 40 million euros: In mid-2008 the deposits of residents with a non-EU passport had reached up to 23 percent of the 205 billion euros deposited then in the local credit system. Now, this rate has plummeted to just 6 percent, as the bank savings of third-country nationals, most of them Albanians, have shrunk from 47 billion to below 7 billion euros.

Hellenic Statistical Authority data also reveal that the drop in the Greek population is not only due to the so-called brain drain – the exodus of young Greek professionals seeking work abroad – but also to the aging of the population, with deaths outnumbering births since 2011, a fact attributed directly to the crisis.

This is also explained by the flight of immigrants who worked for years in Greece and departed at the start of the economic crisis. In fact many of them left just before Greece entered the bailout mechanism in 2010, mainly because of the crisis in the construction sector – where economic migrants were primarily employed – that preceded the crisis of the fiscal and current account deficits at the end of last decade.